Company Overview and History
Boyd Gaming Corporation (BYD) is a leading diversified gaming and hospitality company that has been in operation for over 50 years. Headquartered in Las Vegas, Nevada, the company owns and operates 28 gaming entertainment properties across 10 states, catering to a wide range of customers.
Boyd Gaming Corporation was incorporated in the state of Nevada in 1988, but its origins trace back to 1975 when Sam and Bill Boyd opened the California Hotel and Casino in downtown Las Vegas. From that single property, Boyd Gaming has grown to become one of the largest and most respected gaming companies in the United States. The company's commitment to growth, excellence in operations, and positive impact on its communities have been the guiding principles that have led to its success over the past five decades.
Business Segments and Expansion
Boyd Gaming's diversified portfolio of gaming entertainment properties includes a mix of Las Vegas Locals, Downtown Las Vegas, Midwest and South, and Online segments. This diversification has been a key strength, allowing the company to navigate various market conditions and deliver consistent financial performance. Over the decades, Boyd Gaming has expanded its portfolio through strategic acquisitions and new property developments. Key milestones include the company's initial public offering in 1985 and the acquisition of the Coast Casinos properties in 2004, which significantly increased Boyd Gaming's presence in the Las Vegas locals market.
The company weathered the economic challenges of the Great Recession, emerging as a more disciplined and efficient operator. In the 2010s, Boyd Gaming further diversified its business by entering the online gaming space through partnerships and investments. This included acquiring a 5% equity stake in FanDuel, the leading sports betting operator in the United States. The company also expanded its regional footprint, adding properties in Illinois, Indiana, Iowa, Kansas, and Pennsylvania.
Challenges and Resilience
Challenges faced by Boyd Gaming over the years have included increased competition in key markets, economic downturns, and the need to maintain a disciplined approach to growth and operations. The company has navigated these challenges through a focus on enhancing the customer experience, driving operational efficiencies, and strategic capital allocation. As a result, Boyd Gaming has established itself as a diversified, geographically-dispersed gaming and entertainment company with a strong track record of performance.
Financials
In 2024, Boyd Gaming reported record full-year revenues of over $3.9 billion, setting a new high for the company. The company also achieved nearly $1.4 billion in EBITDA for the year, with property-level operating margins exceeding 40%. This strong financial performance was driven by the company's diversified business model, continued operational efficiencies, and contributions from recent property investments.
For the most recent fiscal year, Boyd Gaming reported revenues of $3.93 billion and net income of $578 million. In the most recent quarter, the company reported revenues of $1.04 billion, representing a 9.1% increase from $954.4 million in Q4 2023. Net income for the quarter was $170.5 million, up from $135.2 million in the same period last year. The company generated operating cash flow of $262.1 million and free cash flow of $150.9 million in the most recent quarter.
Segment Performance
Boyd Gaming operates through four reportable segments: Las Vegas Locals, Downtown Las Vegas, Midwest South, and Online.
The Las Vegas Locals segment, which includes properties such as the Gold Coast Hotel and Casino, The Orleans, and Suncoast Hotel and Casino, has continued to deliver solid results. Excluding the Orleans and Gold Coast properties, the Las Vegas Locals segment exceeded 50% in operating margins during 2024, demonstrating the strength of the company's core customer base and disciplined operations. For the three months ended September 30, 2024, this segment generated $211.8 million in total revenues, a decrease of 4.5% compared to the prior year period, primarily due to a 9.5% decline in gaming revenues. Adjusted EBITDAR for the segment decreased 9.0% to $96.4 million.
The Downtown Las Vegas segment, which includes the California Hotel and Casino, Fremont Hotel Casino, and Main Street Station Hotel and Casino, performed well in 2024. The company's recent enhancements to these properties, including renovations and expansions, have provided a solid foundation for long-term growth. Visitation from the company's Hawaiian customers remains healthy, while pedestrian traffic throughout the downtown area has been steady. Total revenues for this segment increased 7.6% to $53.3 million for the three months ended September 30, 2024, compared to the prior year period, driven by increases across all departmental categories. Adjusted EBITDAR for the segment increased 4.1% to $16.5 million.
The Midwest and South segment, led by the strong performance of the newly opened Treasure Chest casino, has also been a contributor to Boyd Gaming's overall success. The Treasure Chest casino, which opened its new land-based facility in June 2024, has consistently outperformed expectations and remains on track to exceed the company's targeted EBITDA return. Total revenues for the Midwest South segment increased 1.8% to $522.4 million for the three months ended September 30, 2024, compared to the prior year period. Adjusted EBITDAR for the segment increased 3.3% to $196.9 million.
In addition to its brick-and-mortar operations, Boyd Gaming's Online segment, which includes its Boyd Interactive business and collaborative arrangements with third-party operators, has also been a growing contributor to the company's financial performance. In 2024, the Online segment generated $76 million in EBITDAR, excluding $32 million in one-time fees, reflecting continued growth from the company's market access agreements and contributions from its online gaming business. Online revenues increased 56.5% to $141.3 million for the three months ended September 30, 2024, compared to the prior year period. Adjusted EBITDAR for the Online segment increased by $15.0 million to $26.0 million.
Boyd Gaming's managed business, which includes the management fees earned from the Sky River Casino in California, also delivered solid results in 2024, generating $96 million in EBITDAR. The Sky River Casino, which opened in 2022, continues to perform at a high level, and the company has plans for a significant expansion of the property, including the addition of 400 slots, a 1,600-space parking garage, a 300-room hotel, two additional food and beverage outlets, a day spa, and an entertainment and event center.
Liquidity and Capital Allocation
In addition to its strong operational performance, Boyd Gaming has also demonstrated a balanced approach to capital allocation. In 2024, the company returned nearly $750 million to shareholders through a combination of share repurchases and dividends, while also investing in strategic growth opportunities and maintaining a strong balance sheet.
As of September 30, 2024, Boyd Gaming had a debt-to-equity ratio of 2.49, with total debt of $3.10 billion and total equity of $1.63 billion. The company reported cash and cash equivalents of $286.3 million and a total revolving credit commitment of $1.45 billion, with $1.01 billion remaining contractual availability under the Credit Facility. The company's current ratio stood at 0.90, while its quick ratio was 0.87.
Growth Initiatives
The company's growth initiatives include ongoing investments in its existing properties, such as the renovation of hotel rooms at the Orleans, IP, and Valley Forge properties, as well as the expansion of the meeting and convention center at Ameristar St. Charles. The company is also pursuing new development projects, including the Cadence Crossing Casino in Southern Nevada and a resort development in Norfolk, Virginia, which is scheduled to open in late 2027.
For 2025, Boyd Gaming plans to invest approximately $600 million to $650 million in capital expenditures, including $250 million in recurring maintenance capital, $100 million in additional maintenance capital related to hotel room refurbishments, $100 million in recurring property growth investments, and $150 million to $200 million for the development project in Virginia.
Future Outlook
Despite the challenges faced by the gaming industry in recent years, Boyd Gaming has proven its resilience and ability to adapt to changing market conditions. The company's diversified business model, operational excellence, and strategic investments have positioned it for continued growth and success in the years to come.
For 2025, Boyd Gaming expects its Online segment to generate approximately $80 million to $85 million in EBITDAR, compared to $76 million in run rate EBITDAR in 2024. The company also expects its Managed and other businesses to generate a similar amount of EBITDAR in 2025 as in 2024, which was $96 million. Boyd Gaming remains committed to returning $100 million per quarter to shareholders through its share repurchase program, in addition to its ongoing dividend program.
The company expects stability to return to the Orleans and Gold Coast properties in its Las Vegas Locals segment during the second half of 2025 as it fully anniversaries competition. For the Midwest and South segment, Boyd Gaming expects to benefit from an incremental five months of the Treasure Chest expansion, which opened in June 2024.
As Boyd Gaming enters its 51st year in business, the company's commitment to creating memorable experiences for its guests, empowering its team members, and positively impacting its communities remains steadfast. With a strong financial foundation, a pipeline of growth opportunities, and an experienced management team, Boyd Gaming is well-positioned to capitalize on the evolving gaming landscape and deliver long-term value for its shareholders.
The global gaming market continues to show strong growth potential, with the global video game market estimated to be around $217.06 billion in 2022 and expected to grow at a compound annual growth rate (CAGR) of 13.4% between 2023 and 2030. As a multi-jurisdictional operator with properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania, Boyd Gaming is well-positioned to benefit from this industry growth across its diverse portfolio of gaming entertainment properties.